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Lloyd's Maritime and Commercial Law Quarterly

A FLEXIBLE CONTRACT OF CARRIAGE—THE THIRD DIMENSION?

John F. Wilson*

The common law doctrine of privity of contract has been a perennial source of difficulty for litigants seeking to enforce rights and obligations arising under a bill of lading contract. The recent decisions of the Privy Council in The Pioneer Container and of the Canadian Supreme Court in London Drugs v. Kuehne & Nagel provide an opportunity to review and evaluate the various mechanisms devised by the courts to circumvent the privity rule. The endorsement of the bailment on terms solution highlights the artificiality of the doctrine and raises the question as to whether it still has a useful role to play in modern international trade.
The contract of carriage identified in the title to this lecture is the basic bill of lading contract, the terms of which will almost invariably be supplemented by the provisions of the Hague or Hague-Visby Rules. Similar considerations may apply, in appropriate circumstances, to obligations arising under a voyage charterparty but, for present purposes, I shall confine my attention to the contract of carriage covered by a bill of lading. When such a contract is negotiated, a shipper of goods will be aware that the obligations arising from that contract will rarely be performed personally by the contractual carrier, but will be delegated to employees of the carrier or to independent contractors engaged to carry out a particular function, such as stevedores engaged to load or discharge the cargo. A brief glance at the printed terms of the bill of lading will also alert the shipper to the fact that, in many cases, the carrier will reserve the right to delegate performance of the carriage itself to a sub-contractor, although the contractual carrier will normally retain primary responsibility for due performance of the contractual obligations involved.1 Conversely, the carrier, on his part, will be aware that the shipper, to whom he has issued a bill of lading, will subsequently transfer it to the named consignee, who, in turn, may negotiate it to an assignee. In these circumstances it would seem reasonable to expect that the carriage would be undertaken on the agreed terms, including exceptions and limitation of liability provisions, irrespective of the identity of the party who actually performed the contract, or of the party who sought to claim for loss or damage to the cargo: provided, of course, that there was an identity of interest between the respective parties, and that any party seeking the protection of the contractual terms was providing the identical services stipulated in the contract.

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